New Yorkers Brace for Cuts in Unemployment Benefits

Stephanie Cozart is having her unemployment benefits cut to $361 a week, from $405. “Benefits stimulate the economy,” she said. “I spend them on diapers and baby food and so forth.”Credit
Karsten Moran for The New York Times

Federal benefits for New Yorkers who have been unemployed for more than six months have been gradually disappearing. Now, the ones that remain are shrinking.

Starting this week, benefits for more than 140,000 New York State residents will be cut by almost 11 percent as a result of the budget stalemate in Washington. New York is one of the first states to carry out the cuts, which are a result of automatic budget cuts known as sequestration, which mandated an $85 billion across-the-board reduction in spending on military and domestic programs.

For Stephanie Cozart, a stage actress in Manhattan, that means a cut to $361 per week from the $405 she had been receiving since last fall. If she does not find work by the end of September, when the cuts expire, the loss would amount to $1,100.

“It just seems really mean and really dumb, given that everyone knows that unemployment benefits stimulate the economy,” said Ms. Cozart, who is married and has a 7-month-old daughter. “I don’t save my unemployment benefits. I spend them on diapers and baby food and so forth.”

As part of the cutbacks, every state was ordered to reduce the benefits paid to people who have exhausted their 26 weeks of regular unemployment benefits and have begun collecting what are known as emergency unemployment benefits. New York is one of 14 states that was ready by early April to reduce the payments, according to Jason Kuruvilla, a spokesman for the federal Labor Department. The cuts will be proportionally larger in states that take longer to start making them.

Though the budget cuts were uniform, the effect on the unemployed is not. People collecting regular benefits are unaffected. And those collecting emergency benefits in states like Connecticut that have been slower to implement the cuts may find work before losing any benefits. Connecticut expects to make the cut in mid-June, when it will amount to about 19 percent of a weekly payment, or about $112 out of that state’s maximum benefit of $591. New Jersey officials said they did not know when payments would shrink in that state or by how much.

“They’re inequitable,” said Maurice Emsellem, a policy co-director of the National Employment Law Project, which has lobbied to preserve the additional benefits that lawmakers in Washington approved when unemployment soared after the financial crisis.

A study released this month by his group reported that five million Americans have been out of work for 27 weeks or more and that the average duration of unemployment nationwide is now 37 weeks.

In New York, as in many other states, the maximum duration of unemployment benefits stretched to 99 weeks at the depths of the recession. But as the state’s unemployment rate has declined, so has the availability of benefits.

At the end of last year, New York stopped offering a sort of last-resort program known as extended benefits that lasted for up to 20 weeks. Now, the longest an unemployed New Yorker can collect benefits for is 79 weeks.

But some who only recently started collecting emergency benefits, like Ms. Cozart, may only collect them for a maximum of 37 weeks. For most of that period, the benefits would be reduced by the automatic cuts.

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The $44 a week that Ms. Cozart will lose may not sound onerous in New York City, where it would barely cover one prix fixe dinner during Restaurant Week. But advocates for the unemployed point out that they had to lobby for years in Albany to obtain the $5 increase in weekly unemployment benefits that New Yorkers are scheduled to receive next year.

That increase, the first since 2000, will raise the maximum weekly benefit in the state to $410. But it still will be at least $180 lower than the maximum benefit in Connecticut or New Jersey.

Ms. Cozart’s last role was as Aunt Gert in an Off Broadway revival of “Lost in Yonkers,” and she had hoped to find another acting job. But with a baby to feed and clothe and a husband whose job does not provide health insurance, she said she had begun considering office jobs.

“I would much rather have a job that paid well and provided health benefits than be sort of scrimping and saving,” said Ms. Cozart, 42. Referring to the cut in her weekly benefits, she said: “$40 a week adds up. It just made me see red, made me really angry.”

For Patricia Torres, 29, the cut will just be the latest indignity that has followed the loss of her job selling wireless phone service in Downtown Brooklyn in June. Ms. Torres, who said she earned $60,000 a year before she was dismissed, said she had to move out of a Manhattan apartment she shared with a roommate and back in with her grandmother and ailing grandfather.

She said she ran through her savings in the first few months of unemployment and has defaulted on the student loans she took out to study fashion design and marketing. She has no health insurance because the cost to continue coverage provided by her former employer was $800 a month.

Without insurance, she said, she could no longer afford to see her regular doctors or buy all the medicines they have prescribed. Instead, she visits a city-financed clinic at NewYork-Presbyterian Hospital, she said.

Most of the jobs she finds in her searches offer low pay and meager benefits, if any, she said.

“My résumé is pretty strong, which is why I get the interviews,” Ms. Torres said. “But they don’t want to pay me anything. They want me to work for minimum wage, which is less than I get from unemployment” — though by a narrower margin than before this week.

“I’ve worked every single day since I was 17 years old,” she said. “For the first time, I need help and they’re taking it away.”

Correction: April 13, 2013

An article in some editions on Friday about the effect of federal budget cuts on emergency unemployment benefits for New York State residents misstated the status of cuts to unemployment benefits in New Jersey. New Jersey officials say they did not know when payments will shrink or by how much; the payments will not “start shrinking this week by as much as $66.”

A version of this article appears in print on April 12, 2013, on Page A21 of the New York edition with the headline: New Yorkers Brace for Cuts in Unemployment Benefits. Order Reprints|Today's Paper|Subscribe